Update: We reported in July on the rise of two San Francisco ridesharing startups, Lyft and SideCar. Both companies have since expanded their reach in the Bay Area, and have yet to run into any thorny legal issues so far. These ride-sharing companies claim that they are not taxi companies, even though they act very similar to taxi companies. The pair is serving a much smaller area than Uber, a smartphone-powered black-car service focusing on the upper tier of the market.

Uber, which also operates in San Francisco, has been facing increasing legal scrutiny in cities around the country. Last week, Washington, DC, again proposed new anti-Uber regulations, this time banning car firms with less than 20 cars in their fleet. Recently, though, the company beat back a state-issued cease-and-desist order in Massachusetts to successfully launch in Boston. Uber—which still operates in San Francisco—remains under investigation by the California Public Utilities Commission, the state agency that regulates limousines. As Lyft and SideCar expand in the City by the Bay, they may end up facing similar legal challenges.

SAN FRANCISCO—As I drove over the Bay Bridge and passed into the city on a recent Friday afternoon, I faced a crisis of will. Was I truly willing to attach a hot pink Carstache—which is precisely what it sounds like—to the grill of my black Toyota in the name of journalism?

I pulled onto Harrison Street, into a section of the SoMa (South of Market, San Francisco’s startup hub) district that's full of new high-rise residential buildings. I stepped out into the summer afternoon, opened my trunk, and whipped out the ridiculously large but definitely distinctive Carstache. I walked to the front of my car and did the deed. Carstache affixed. Now I was set to begin my first work shift.

Last week, I completed my orientation and training as a driver for Lyft. It's the new service from Zimride, a ride-sharing website started back in 2007. Lyft launched in limited form back in late May. Its goal? To connect drivers and passengers through the company’s free iPhone app. In essence, it’s a social, tech-driven way to compete with taxis (notoriously difficult to find in San Francisco). Think AirBnB—another local startup that lets people worldwide rent out their extra rooms, apartments, homes, teepees, and yurts—but for cars.

Lyft isn’t the only company offering this type of service; the similar SideCar just launched in June. So over the last two weeks, I became a registered driver on both sites. And I'm one of the first. I’m fairly certain at the time of this article, I’m one of the first 50 drivers on Lyft and one of the first 100 drivers on SideCar. In effect, I’ve begun moonlighting as a very part-time not-quite-taxi driver.

With Carstache in place, I spent 90 minutes tooling around various neighborhoods. Mission District, Potrero Hill, North Beach, the Financial District—all without seeing a single request (and worrying often that the Carstache might fall off). Finally I got the first signal. My first pickup was only five minutes away. As soon as I accepted the mission, I rolled from the Financial District back down into SoMa to pick up a guy named Matt. In his user icon, he appeared to be hugging an original Macintosh. Matt also had a perfect 5.0 customer rating. I liked him already.

I rolled up sportin’ the ‘stache and parked for a minute in front of his building. When Matt came down, I greeted him with the traditional Lyft greeting (I've been trained on this!): a fist-bump.

I invited Matt to sit up front and adjust the music as he liked. After all, I've been told to treat him just as I would any other friend riding with me. I even invited Matt to use the extra USB jack to charge his iPhone—Lyft provided one for me and the passenger to juice up during the ride.

With Lyft, the passenger tells me where he or she wants to go (maximum 60 mile radius). When the ride ends, the Lyft app provides a “suggested donation”—about 20 percent lower than what a cab would charge for the same fare.

“Where we headed?” I asked Matt.

“SFO,” he said.

“We can do that,” I responded cheerfully, remembering the training mantra that Lyfters should smile a lot. I pulled away from the curb.

Matt worked for Path and was on his way to Las Vegas for a friend’s bachelor party. I looked him up later and learned that he was Matt Van Horn, who had helped found Zimride, Lyft’s parent company. Later, by e-mail, he elaborated on his connection to the company, he's “a shareholder, power user of Lyft, and friend of the company." He was happy to describe his previous 30 ride experiences too.

“All have been positive,” he wrote. “Everyone has been really accommodating, kind, and fun. I had one driver who picked me up from my apartment to take me to a haircut, then asked if I wanted him to stay in the area in case I wanted a ride to work after. After my 10 minute haircut, I already had a Lyft ready to take me to work and it literally took 20 minutes out of my day instead of the usual hour it takes for a haircut.”

Once I dropped Matt off, I gave him a 5-star rating and hoped that he’d do the same for me.

My first experience proved fairly typical. After a few hours on duty, you quickly realize two things: 1) the hotspot pickup area is near downtown in the late afternoon and 2) the pink Carstache definitely gets attention.

“I’ll be parked somewhere and then ten people will walk by and say, ‘Whoa, look at that pink mustache,’” Nancy Tcheou, 25, a fellow Lyft driver, told me last Monday by phone. “I’ve had at least three people take a picture of it while I was parked, in the car. It’s been really entertaining.”

"If it walks like a duck..."

Using the SideCar app

The Bay Area is no stranger to innovations in transportation. For decades now, the “casual carpool” system has offered an inexpensive way for East Bay passengers to get to San Francisco. It saves everyone time and money (no one will complain about paying less for the westbound bridge toll). For over a decade, the city has also had official carsharing companies and non-profits operating within its 49 square miles. This fall, San Francisco is even expected to launch a bike-sharing service.

San Francisco has a burgeoning tech-transportation scene, too. Just last year, the company Getaround launched; allowing individuals to turn their personal vehicles into car-shares. Established companies like Cabulous and Uber recently announced an expansion of their consumer offerings in San Francisco, too.

Yet despite the various transport options, San Francisco has less-than-stellar taxi service. I live in Oakland and never take taxis, but this is what people, online and offline, tell me.

Both Lyft and SideCar have the potential to shake up the local transportation industry further, but only if their business is acceptable to the powers that be. Sure, it's neat to catch a ride from another tech-savvy human rather than from an anonymous taxi driver who might be more interested in blabbing away on his phone than in catering to you. But lawyers and city officials say that both companies might be in conflict with local taxi law.

Lyft and SideCar both insist, however, they are simply ride-sharing companies, not taxis operators. In essence, I drove around like a taxi and dropped people off like a taxi, but both companies say that I’m definitely not a taxi. I’m not getting paid for fares; I'm getting a voluntary “donation.” (Of course, low customer ratings received after underpaying too often would probably result in a rider not getting rides in future).

“Passenger agrees that Passenger shall solely use SideCar for personal, ride-sharing purposes only, and shall not use SideCar for any commercial purposes. Use of SideCar ride-sharing for any commercial purposes (as determined by SideCar in its sole and absolute judgment) shall result in immediate termination of Passenger’s account. Passenger expressly acknowledges that SideCar is solely a ride-sharing marketplace, and not a common carrier, limousine or taxicab service, or travel agent.”

I ran the idea past the former deputy director of the San Francisco Taxi Commission, Jordanna Thigpen. Despite what the companies say in their own legal documents, the judicial system may have its own view.

“Sometimes in the law, judges will interpret a statute [in this way]: if it looks like a duck, if it walks like a duck, it’s a duck,” said Thigpen, now an attorney with Cotchett, Pitre, and McCarthy.

In her former position as enforcement and legal affairs manager for the taxi division of the San Francisco Municipal Transportation Authority, Thigpen said that she would focus largely on safety. She frequently checked (among other things) not just that the vehicle in question had insurance at the time of inspection, but that there was continuous coverage—as the law requires of taxi companies.

“[Lyft and SideCar] are trying to put themselves in this netherworld of regulation,” Thigpen said. “The determination is: how is a court going to interpret the definition of ‘for hire’ vehicle?” For now, company representatives insist they are not a "vehicle for hire."

"We’ve worked with transportation legal experts who confirm we are abiding by current laws," said John Zimmer, the founder of Zimride, in an e-mail sent to Ars. "Lyft is a community based ride-sharing service that is an extension of our existing long distance ride-share model. We use optional donations as a way for drivers to reimburse the costs associated with owning and operating a vehicle."

There may be a debate to be had about whether regulations for taxi services are all reasonable, but one of the goals is to make sure that people get safely to their destination and charged the correct amount. The insurance requirement is also there to protect the passenger. This has a fun, easy-going feel, but I'm not sure that should really trump safety and fraud prevention.

Government simply has no compelling justification to use force (the threat of fines and/or imprisonment) to prevent an adult from contracting with another adult to do something which would otherwise be legal were money not involved. There are always well-intentioned excuses for such government intrusion on basic rights, such as fraud prevention--but fraud is already illegal, such laws already serve as a reasonable enough deterrent to prevent most of it, and the voluntary rating and reputation systems which "ride-sharing" communities use are excellent and less-intrusive ways to be proactive with the same issues professional licensing has traditionally tackled.

There can even be professional organizations which offer voluntary licensing, inspections, etc., to which companies or individuals could choose to submit for the purpose of gaining a recognized accreditation. Government need not mandate it; the market would provide for such a thing because some customers would find it an added value.

So by that logic, government should also get out of regulation of, say, medical care (why can't I hire a cheaper doctor who doesn't have that piece of paper?) and wages. Maybe you support this stance? I don't.

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Not to mention preventing various forms of discrimination (whether not picking up certain people, or not providing services to certain areas e.g. black neighborhoods).

The idea that no one would ever serve minority communities if not for government mandates requiring it is a strangely common fixation, and a very mistaken one. Many of the reasons why this is the case are tackled in this nice little article:

Even in then worst of times, when minority communities were pervasively discriminated against and systematically underserved, free markets allowed them to develop ways to serve themselves--e.g., Motown records, and the many Jewish institutions which developed and were at the cutting edge of economics, politics, and technology for centuries because of discrimination against them. When government decides to get involved, however, it's more often to do harm rather than good--for example "separate but equal" Jim Crow laws which worsened and codified what had been informal discrimination into formal law.

Those links talk about the principles. But in practice there are many real examples where taxis would not serve certain areas. I don't think a taxi driver is likely to think "I'm not picking that guy up because he's black", which is where that logic comes in. I think they are more likely to think something like "that black guy looks like a thug and I don't feel safe with him in my car." When you think about things that way, the fact that you are missing out on a little income can very well feel acceptable. Or "black guys never tip" so you would be losing income anyway. In both cases you consider the math and decide to leave money on the table. But if you are applying these blanket judgments on a racial basis, then blacks can't hire taxis, or have to wait much longer for one because the first several don't show up.

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The counterargument is that regulation also serves to maintain rates at a certain level, and that may not be good for consumers. But I don't think this is the best solution, especially given that part of why they are undercutting the competition is by cutting corners on licensing, vehicle maintenance, and employee pay and benefits (since basically they are getting a large number of part-timers to do the work).

It's not a legitimate role of government to create artificial scarcities and barriers to entry, even if the goal is artificially increasing wages and benefits--because government can only do so by violating one party's basic rights in order to enrich another party. That's bad enough, but then government licensing mandates for things as basic as sharing transportation or the like always lag behind the times when disruptive technologies develop and prop up old, inefficient industries at a great cost to their forced-to-keep-using-them customers.

I think arguing that government should not limit the number of taxi licenses is not an unreasonable argument. What I'm saying is that new competition should not compete by removing safeguards.

In my opinion, this is not ridesharing. Not even close. So it's not appropriate to say this is about licensing sharing transportation. This is a taxi service. There are ideas here like internet dispatch, which are good ideas, but they could be used by a regular taxi service. Volunteer workforce in private cars is not a good solution.

that doesnt raelly make sense... you already trust that person so you dont need a 3rd party to check things like driving ability, insurance etc.

It is the same reason I would lend a friend £10, but not to a complete stranger...

You don't necessarily trust that person to drive. Say you met that person at a bar. Then the person calls you up and says a bunch of people are going hiking that weekend - do you want to come along? Should that person have to be licensed as a taxi driver?

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Private cars don't do anywhere near the amount of kilometres a taxi would, even a temporary one like these.

That's because there are fewer taxi drivers. But in aggregate, you probably spend more time in a car with a friend at the wheel than in a taxi.

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Wrong. Everyone would do things like take all the holidays off, or avoid late shifts and nobody would ever get a taxi. It's bad enough in regulated taxi markets on the big nights like NYE and so forth.

Why should taxi drivers be forced to work holidays? Should they not be able to see their families? And certainly if most people take holidays off, the ones who do work holidays would be able to charge more (which is entirely fair), so people without families or desire to celibrate would have an incentive to work.

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And everyone would skip all the routes that lose you money, like one way trips to longer distances, or simply not answer any calls.

As should be anyone's right.

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I don't know how it is everywhere, but in Australia the license to run a taxi costs a lot of money, and you need to actually RUN a taxi, you can't decide not to have your car on the road. There needs to be enough vehicles out there to support the population, and you can't pick and choose the cushy jobs and ignore the low profit ones.

That's silly. Sure there should be enough taxis, but the decision shouldn't be up to a bunch of bureaucrats. Just like there shouldn't be a Food Mart Board deciding how many food marts there should be per square mile.

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Nope, this is a fallacy. These half-assed services only can exist by relying on the regulated services to cover the rest of the market.

If there's a market, there would be a service. Now, some routes and times might get cheaper and others might get more expensive to account for the true cost of providing the service, and some routes and times may get heavier service and others lighter service to account for the true demand. That's exactly what should happen.

Let me ask people arguing for regulated taxis (not that I'm opposed to some regulation of taxis; just the kind here) a question. In my earlier post I related an anecdote about a carpooling service to camp. Should that have been illegal, so that for safety's sake, I wouldn't have been able to socialize and make friends, learn to swim, do sports (which as a skinny kid I really needed), do arts and crafts, etc.? If so, how is that your, and not my parents', call to make? Should the service in the article be illegal and if so, why should people knowingly opting out of regulated taxis not be allowed to do so? Who are you to make these decisions on their behalf? On the other hand, if the services in the article should be legal, why should it be legal to get around regulations via loopholes/legal subtleties and not directly?

I think people here trust regulations far too much. Many taxi regulations are not to help people. They're to benefit existing taxi companies. They fix prices to legally entrench collusion. They fix number of medallions to prevent competition. They legislate business model to prevent companies like the one in the article from coming on the scene and providing a better service, thus taking away business. They're anticompetitive; people supporting them are rationalizing them after the fact.

Nobody should be banned from driving others, whether for pay or not. Or should car-pooling be banned? When I went to summer camp as a kid, some counselors volunteered to drive campers for a small stipend. They drove their own cars, not at all regulated under taxi laws. Should that have been banned, so that I wouldn't have been able to get to camp, in the name of safety?

Seriously. It was not even two full generations ago that hitchhiking was not just common, it was expected. Nowadays people are so full of fear of their fellow citizens that they wouldn't even think of asking a stranger for a ride somewhere, or offering one to someone who needs one. Is it this a side-effect of "stranger danger" propaganda at very young ages? Have we educated our population to be antisocial as a matter of course?

But if you are applying these blanket judgments on a racial basis, then blacks can't hire taxis, or have to wait much longer for one because the first several don't show up.

That is only a real problem if the barrier to entry is artificially high. If the barrier to entry is low, then that leaves a prime underserved market for some service that specifically caters to black neighborhoods, for example, and you could expect that demand to be met providing the customers are willing to pay enough to cover their costs.

I don't know how it is everywhere, but in Australia the license to run a taxi costs a lot of money, and you need to actually RUN a taxi, you can't decide not to have your car on the road. There needs to be enough vehicles out there to support the population, and you can't pick and choose the cushy jobs and ignore the low profit ones.

That's silly. Sure there should be enough taxis, but the decision shouldn't be up to a bunch of bureaucrats. Just like there shouldn't be a Food Mart Board deciding how many food marts there should be per square mile.

The bureaucrats never set a minimum number of taxis, they can't. Sometimes they set a maximum number, just like zoning might also limit the number of food marts but not require additional food marts to be built.

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Nope, this is a fallacy. These half-assed services only can exist by relying on the regulated services to cover the rest of the market.

If there's a market, there would be a service. Now, some routes and times might get cheaper and others might get more expensive to account for the true cost of providing the service, and some routes and times may get heavier service and others lighter service to account for the true demand. That's exactly what should happen.

What you propose would lead to the circumstance where there is a taxi available at 3 in the morning, but they can change outrageous fares because they have a virtual monopoly. I don't want to pay $500 to get home because the guy behind the wheel knows I have no choice. Or have to call a dozen different services to find the only one that actually is running at this hour in this area.

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Let me ask people arguing for regulated taxis (not that I'm opposed to some regulation of taxis; just the kind here) a question. In my earlier post I related an anecdote about a carpooling service to camp. Should that have been illegal, so that for safety's sake, I wouldn't have been able to socialize and make friends, learn to swim, do sports (which as a skinny kid I really needed), do arts and crafts, etc.? If so, how is that your, and not my parents', call to make? Should the service in the article be illegal and if so, why should people knowingly opting out of regulated taxis not be allowed to do so? Who are you to make these decisions on their behalf? On the other hand, if the services in the article should be legal, why should it be legal to get around regulations via loopholes/legal subtleties and not directly?

There's a real difference between a taxi service, in which you can get picked up anywhere and dropped off anywhere, and a shuttle service to a particular destination.

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I think people here trust regulations far too much. Many taxi regulations are not to help people. They're to benefit existing taxi companies. They fix prices to legally entrench collusion. They fix number of medallions to prevent competition. They legislate business model to prevent companies like the one in the article from coming on the scene and providing a better service, thus taking away business. They're anticompetitive; people supporting them are rationalizing them after the fact.

Some of the regulations benefit existing taxi companies, by limiting the number of taxis and by raising the cost of entry into the market. I agree that far. But they also serve to protect consumers and ensure coverage of all areas for everyone. I think you want to throw out the baby with the bathwater.

Well, SFMTA, this sort of creative business model wouldn't even exist if it wasn't for the fact that you're a bunch of complete fucks about allowing more taxi medallions in the city, would it, you stupid, corrupt shits? So thanks, you fascist, cronyist fuckfaces!

That's because there are fewer taxi drivers. But in aggregate, you probably spend more time in a car with a friend at the wheel than in a taxi.

What are you even talking about? I'm telling you that commercial cars like taxis do a lot more work than private cars, thus are at far greater risk of mechanical failure, that's why they get inspected.

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Why should taxi drivers be forced to work holidays? Should they not be able to see their families? And certainly if most people take holidays off, the ones who do work holidays would be able to charge more (which is entirely fair), so people without families or desire to celibrate would have an incentive to work.

You have no idea what you are talking about. Nobody is held at gunpoint to drive a taxi, and if you drive a taxi it's expected you'll have to work times like holidays and night time when other people don't want to take their car. Do you think emergency services like police, or airline pilots, support staff for utilities like power, water, communications should be able to take holidays off too? Ah too bad your power is out, we've all gone home for the Christmas period, we'll catch you after the new year! Bye!

jdale already pointed out how much fun it will be when you try to get home on NYE and there are no taxis on the road, and if you managed to get one, he'll charge you $500 to get home, laughing at the knowledge you have no choice.

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As should be anyone's right.

What's with people and this ridiculous parroting of rights? If you want to earn money servicing an area as any business like transport, you need to transport anyone in the area, not just pick and choose. That's why regulation came into place.

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That's silly. Sure there should be enough taxis, but the decision shouldn't be up to a bunch of bureaucrats. Just like there shouldn't be a Food Mart Board deciding how many food marts there should be per square mile.

In your massively uninformed view of the world, nobody outside a major city CBD would have power, water, phone lines, or stores, you do realise this?

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If there's a market, there would be a service. Now, some routes and times might get cheaper and others might get more expensive to account for the true cost of providing the service, and some routes and times may get heavier service and others lighter service to account for the true demand. That's exactly what should happen.

Ah, the invisible hand of the market that fairly apportions required services and profits. You do know that doesn't work at all, right?

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Let me ask people arguing for regulated taxis (not that I'm opposed to some regulation of taxis; just the kind here) a question. In my earlier post I related an anecdote about a carpooling service to camp. Should that have been illegal, so that for safety's sake, I wouldn't have been able to socialize and make friends, learn to swim, do sports (which as a skinny kid I really needed), do arts and crafts, etc.? If so, how is that your, and not my parents', call to make? Should the service in the article be illegal and if so, why should people knowingly opting out of regulated taxis not be allowed to do so? Who are you to make these decisions on their behalf? On the other hand, if the services in the article should be legal, why should it be legal to get around regulations via loopholes/legal subtleties and not directly?

Nobody gives a shit if people give each other rides to places. They give a shit when they try to come into a regulated industry that is regulated because of safety and fair prices, then try to make a profit without having to follow the existing regulations that everyone else has to work under. How would you like it if a competitor to your business could operate without having to pay attention to laws like fair work practises, safety, tax and corporate laws and so forth, then undercut the shit out of you?

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I think people here trust regulations far too much. Many taxi regulations are not to help people. They're to benefit existing taxi companies. They fix prices to legally entrench collusion. They fix number of medallions to prevent competition. They legislate business model to prevent companies like the one in the article from coming on the scene and providing a better service, thus taking away business. They're anticompetitive; people supporting them are rationalizing them after the fact.

Yes, all those bastard rich taxi owners, making money hand over fist with their government assisted cartels! They stop driving their taxis and then go home in their limos to their mansions!

Jesus, you've clearly showed you know nothing about this, yet you are 100% sure that the regulations are there only to protect profits. Why would the government give a shit about making some taxi owners rich? You think the current taxi owners like all these regulations? It costs them a shit ton of money to comply with them.

The bureaucrats never set a minimum number of taxis, they can't. Sometimes they set a maximum number, just like zoning might also limit the number of food marts but not require additional food marts to be built.

Setting a maximum is just as bad. Zoning is quantitatively different: there's still a large degree of flexibility, where restaurants can become delis can become clothing stores. Similarly, the number of taxis can't exceed the number of cars, but that limit's so high that it's irrelevant.

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What you propose would lead to the circumstance where there is a taxi available at 3 in the morning, but they can change outrageous fares because they have a virtual monopoly. I don't want to pay $500 to get home because the guy behind the wheel knows I have no choice. Or have to call a dozen different services to find the only one that actually is running at this hour in this area.

Outrageous prices would not exist because other players would compete and drive down prices. Note that currently you do pay those "outrageous prices", except spread over daytime rides that subsidize the nighttime rides. If supply were able to fluctuate, the majority of people would pay lower prices and the average cost would go down. Fixing the price subsidizes the few at the cost of the many, and increases average price as well.

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There's a real difference between a taxi service, in which you can get picked up anywhere and dropped off anywhere, and a shuttle service to a particular destination.

Then we're just arguing semantics.

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Some of the regulations benefit existing taxi companies, by limiting the number of taxis and by raising the cost of entry into the market. I agree that far. But they also serve to protect consumers and ensure coverage of all areas for everyone. I think you want to throw out the baby with the bathwater.

But coverage shouldn't necessarily be ensured. There isn't some fundamental right to taxis. Nor are safety requirements necessary beyond the competence of your average driver. For one thing, you are still at the mercy of other drivers, who could crash into the cab. For another, cab drivers are not known for being safe so I doubt those regulations are doing much of anything except restricting the supply of cabs. And you shouldn't force the quantity of safety you desire on everyone else - there may be more important factors, such as in the anecdote I provided earlier.

What are you even talking about? I'm telling you that commercial cars like taxis do a lot more work than private cars, thus are at far greater risk of mechanical failure, that's why they get inspected.

Maybe full-time taxis, but not the ones mentioned in this article and not casual carpooling cars, which exemplifies the problem with such regulation: it assumes something about a particular business, and thus enshrines or enforces a business model. What would be vastly preferable would be distance-based inspections for all vehicles on public roads, which would account for full-time taxis.

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You have no idea what you are talking about. Nobody is held at gunpoint to drive a taxi, and if you drive a taxi it's expected you'll have to work times like holidays and night time when other people don't want to take their car.

Why? Should the same apply to convenience stores?

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Do you think emergency services like police, or airline pilots, support staff for utilities like power, water, communications should be able to take holidays off too? Ah too bad your power is out, we've all gone home for the Christmas period, we'll catch you after the new year! Bye!

Give me a frigging break. For one thing, police, emergency services, utilities, etc. are either public or private monopolies, and thus must provide continual service. Secondly, they rotate employees: some get Christmas off; some work holidays. Typically people who work holidays get extra pay. Thirdly, they provide fundamental and essential services for society to function. No cab driver satisfies any of these three conditions, which means it's like forcing a convenience store to operate 24/7. Don't like it? Too bad - you didn't have to run a convenience store.

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jdale already pointed out how much fun it will be when you try to get home on NYE and there are no taxis on the road, and if you managed to get one, he'll charge you $500 to get home, laughing at the knowledge you have no choice.

Yeah, and we should mandate multiple convenience stores per town center because if there were just one, it could overcharge you.

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What's with people and this ridiculous parroting of rights? If you want to earn money servicing an area as any business like transport, you need to transport anyone in the area, not just pick and choose. That's why regulation came into place.

What's with you parroting your views as fundamental axioms? Why should anyone be forced to drive certain places at certain times? Why should one not be able to specialize for certain routes, times, etc.? Why should someone not be able to run an airport taxi, or a rush hour taxi, or a long-distance service, etc.?

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In your massively uninformed view of the world, nobody outside a major city CBD would have power, water, phone lines, or stores, you do realise this?

WTF? Where the hell did that come from? I never argued anything that implies that.

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Ah, the invisible hand of the market that fairly apportions required services and profits. You do know that doesn't work at all, right?

Yeah, people starve in the street because there are no grocery stores. There are no cabs either because they aren't mandated. Why exactly would cabbies not move in to fill profitable and underserved markets? There would be a clear and obvious incentive for them to do so - why would they forego that easy money?

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Nobody gives a shit if people give each other rides to places. They give a shit when they try to come into a regulated industry that is regulated because of safety and fair prices, then try to make a profit without having to follow the existing regulations that everyone else has to work under.

You weaseled out of answering the question. Should those two for-pay driving services be allowed or not?

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How would you like it if a competitor to your business could operate without having to pay attention to laws like fair work practises, safety, tax and corporate laws and so forth, then undercut the shit out of you?

If those laws were bullshit, I would work to get them repealed on principle so I wouldn't have to follow them either.

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Yes, all those bastard rich taxi owners, making money hand over fist with their government assisted cartels! They stop driving their taxis and then go home in their limos to their mansions!

The taxi drivers aren't the ones reaping the profits - it's the owners of the companies.

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Jesus, you've clearly showed you know nothing about this,

Okay...

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yet you are 100% sure that the regulations are there only to protect profits.

Yeah, 100% sure...

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Why would the government give a shit about making some taxi owners rich?

One of the taxi companies down here in Monterey are already half way to this. All the cabbies have tablets on Sprint's network in their cars where they get their calls and they don't come through the radio anymore. All they need is an app so I don't have to call the cab company twice a week (for my husband's formations in the mornings the bus doesn't run early enough). That would be cool if they finally do make an app! I wonder if they'll ever do it. Hmmmm...

Why do I get the feeling that this would only ever work in San Francisco? I can't imagine the citizens of NY or London ever signing up for a scheme that puts them in close proximity (never mind direct conversation) with strangers.

In the DC are drivers pick up strangers to have enough people in the car to use the car pool lanes/bridges. They are called slugs.

Until we do get the perfect, utopian, self-regulated society, there's no way in hell the individual driver's insurance companies are going to cover this under your regular old personal use policy. They'll either cancel your coverage, or jack up the rates to the same or above what a commercial taxi pays.

What you propose would lead to the circumstance where there is a taxi available at 3 in the morning, but they can change outrageous fares because they have a virtual monopoly. I don't want to pay $500 to get home because the guy behind the wheel knows I have no choice. Or have to call a dozen different services to find the only one that actually is running at this hour in this area.

Outrageous prices would not exist because other players would compete and drive down prices. Note that currently you do pay those "outrageous prices", except spread over daytime rides that subsidize the nighttime rides. If supply were able to fluctuate, the majority of people would pay lower prices and the average cost would go down. Fixing the price subsidizes the few at the cost of the many, and increases average price as well.

I would argue that spreading the costs out (requiring equal prices day and night, weekday and holiday) exposes those costs to full competition, and keeps average prices down.

Remove the subsidy and there is less competition for the less desirable times, and less competition means average prices go up.

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There's a real difference between a taxi service, in which you can get picked up anywhere and dropped off anywhere, and a shuttle service to a particular destination.

Then we're just arguing semantics.

We're arguing policy, and to be implementable, policies have to be specific. Anyway, the definition of "taxi" is pretty central to the article at hand. I argue that the service offered here is a taxi service (which is debated), but that actual ridesharing (taking on passengers who are going more or less where you are going anyway) and shuttle services are not.

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Some of the regulations benefit existing taxi companies, by limiting the number of taxis and by raising the cost of entry into the market. I agree that far. But they also serve to protect consumers and ensure coverage of all areas for everyone. I think you want to throw out the baby with the bathwater.

But coverage shouldn't necessarily be ensured. There isn't some fundamental right to taxis. Nor are safety requirements necessary beyond the competence of your average driver. For one thing, you are still at the mercy of other drivers, who could crash into the cab. For another, cab drivers are not known for being safe so I doubt those regulations are doing much of anything except restricting the supply of cabs. And you shouldn't force the quantity of safety you desire on everyone else - there may be more important factors, such as in the anecdote I provided earlier.

It's not about a "right to taxi service." It's about maintaining quality of life, it's about providing people with an alternative to owning cars (which is good for everyone), it's about making your city accessible to visitors (who spend money in your city). I think these are reasonable goals for a municipal government to use as a basis for setting policies.

I would argue that spreading the costs out (requiring equal prices day and night, weekday and holiday) exposes those costs to full competition, and keeps average prices down.

Remove the subsidy and there is less competition for the less desirable times, and less competition means average prices go up.

Empirically, that's not how it ends up working. Assuming no change in people's behavior between fixed-rate and variable-rate pricing, the fixed rate is set at the average variable rate and so total cost is the same. But people do change behavior when rate is fixed relative to when it's variable, tending to favor the previously more expensive rates over the previously cheaper rates. As a result, average cost increases. This happens all the time when goods are subsidized: for example, subsidies from urban areas to suburbs enabled mass migration to the suburbs, leading to higher overall infrastructure costs (for better or worse), so this argument isn't merely theoretical.

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We're arguing policy, and to be implementable, policies have to be specific. Anyway, the definition of "taxi" is pretty central to the article at hand. I argue that the service offered here is a taxi service (which is debated), but that actual ridesharing (taking on passengers who are going more or less where you are going anyway) and shuttle services are not.

I understand that the law must have clearly defined terms, but if we call taxis potatoes the law still works the same way. Whatever you call various ways of driving people around for pay, my fundamental argument is the same.

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It's not about a "right to taxi service." It's about maintaining quality of life, it's about providing people with an alternative to owning cars (which is good for everyone), it's about making your city accessible to visitors (who spend money in your city). I think these are reasonable goals for a municipal government to use as a basis for setting policies.

In order to maintain that quality of life, you need to make others do ceratin things. I understand your point of view; I just tend to find it unsavory to make people provide certain services merely for the convenience of others, when they (maybe not each individual, but in aggregate) would generally provide those services without coercion. Now, less convenient or common routes would be more expensive, but I would argue that those are a luxury, and that forcing people to provide those services below cost is unfair.

Seems like a great way for sex offenders to get people in their car. Especially if other competing services start springing up with less stringent interviews and procedures.

@Cyrus - What vetting and other safety measures, if any, are there during the training and recruitment of staff?

Oh my god, not sex offenders! Shut down everything!

Both Lyft and Sidecar purport to do background checks on potential drivers. Any registered sex offender will show up on even a casual investigation. There's a readily accessible database that has all of them in the system. If the sex offender is not registered then there's no way to know if he or she is your driver, or the cashier at your Wal-Mart, or working as an account or...really, who the hell cares? Are we really that afraid of these people that this needs to be cause for concern. Are there that many sex offenders out there?

Hint: as a member of law enforcement who regularly has to check the offender registry and works closely with the sex offender registration team the answer to that last question is no, no there is not.

Maybe full-time taxis, but not the ones mentioned in this article and not casual carpooling cars, which exemplifies the problem with such regulation: it assumes something about a particular business, and thus enshrines or enforces a business model. What would be vastly preferable would be distance-based inspections for all vehicles on public roads, which would account for full-time taxis.

Try get your private car insurance to pay medical costs when they find out you crippled a paying passenger. They won't pay out for un-inspected commercial vehicles either.

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Why? Should the same apply to convenience stores?

Yes? If you don't want to work nights or holidays, don't apply for a job in a business that does that?

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:rolleyes: Give me a frigging break. For one thing, police, emergency services, utilities, etc. are either public or private monopolies, and thus must provide continual service.

I didn't know there was only 1 airline, 1 communications company, 1 power company with a monopoly. Oh wait, you are full of shit, there isn't. They are forced to provide a level of service because otherwise they wouldn't provide it to anyone who wasn't maximising their profits.

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Secondly, they rotate employees: some get Christmas off; some work holidays.

Hmm. So do taxi drivers.

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Typically people who work holidays get extra pay.

Hmm. So do taxi drivers. Holidays are the best times to earn money.

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Thirdly, they provide fundamental and essential services for society to function.

Hmm. So do taxi drivers. If they didn't, the exact company under discussion in this article wouldn't exist to try operate in the grey area of the market. Nobody would give a shit and would simply not take a taxi.

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No cab driver satisfies any of these three conditions, which means it's like forcing a convenience store to operate 24/7. Don't like it? Too bad - you didn't have to run a convenience store.

0 for 3. You don't know anything about this, but you keep talking like you do.

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Yeah, and we should mandate multiple convenience stores per town center because if there were just one, it could overcharge you.

A convenience store already charges more based on its opening hours. Another convenience store can't open up across the road and break regulations and undercut them.

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What's with you parroting your views as fundamental axioms?

You seem confused. I'm stating what actually exists in the world. You are parroting unrealistic and completely clueless "solutions".

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Why should anyone be forced to drive certain places at certain times? Why should one not be able to specialize for certain routes, times, etc.? Why should someone not be able to run an airport taxi, or a rush hour taxi, or a long-distance service, etc.?

Err, they do? And they are also regulated? Limos? Car services? Airport shuttles? Hotel shuttles?

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WTF? Where the hell did that come from? I never argued anything that implies that.

Yes you did, when you made some random bureaucrat jab that the market should solve everything. That's what happens when the market is let free to run itself. Regulating industries certainly has its own problems, but it beats the alternative.

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Yeah, people starve in the street because there are no grocery stores.

Sigh, stores operate under regulations as well. And uh, newflash, governments actually do operate grocery stores in areas that can't support a privately owned store, because people would literally starve in the streets otherwise.

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There are no cabs either because they aren't mandated. Why exactly would cabbies not move in to fill profitable and underserved markets? There would be a clear and obvious incentive for them to do so - why would they forego that easy money?

They would, they'd go for the easy money, and leave everyone else shit out of luck. This is the part you don't understand about the world.

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You weaseled out of answering the question. Should those two for-pay driving services be allowed or not?

They already exist, and are regulated.

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If those laws were bullshit, I would work to get them repealed on principle so I wouldn't have to follow them either.

And if the laws weren't bullshit? You'd shrug your shoulders and let the other business sink you, right? No, you'd expect them to follow the same rules as you operate under.

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The taxi drivers aren't the ones reaping the profits - it's the owners of the companies.

What companies?

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Okay...

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Yeah, 100% sure...

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Why would the government give a shit about making some taxi owners rich?

You? Where is this happening with taxis? Where are all these "rich companies" or whatever? Does anyone think running a taxi is actually an easy path to riches?

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You think companies don't increase prices to cover that? That they don't laugh all the way to the bank due to reduced competition? You're the one with no clue.

Of course they increase prices to cover complying with the laws they operate under, every company does. And who is laughing to the bank with some evil government assisted monopoly? You are acting like there is some evil cabal of vague "taxi companies" earning millions of dollars while all the drivers earn nothing, in bed with the government and busily enacting laws and regulations to keep the gravy train going.

When actually all these regulations cost anyone who has anything to do with taxis large amounts of money.

Nobody should be banned from driving others, whether for pay or not. Or should car-pooling be banned? When I went to summer camp as a kid, some counselors volunteered to drive campers for a small stipend. They drove their own cars, not at all regulated under taxi laws. Should that have been banned, so that I wouldn't have been able to get to camp, in the name of safety?

MyGaffer wrote:

Do you think the FDA should be abolished? I mean any adult should be able to pay any other adult for any old food and any old drug he cares to sell right? Regardless of whether the food if tainted or the drugs are safe. We give up a little bit of freedom for safer food and medicine. There are reasons for the current regulation of taxis.

The FDA certainly should not have the authority to ban. It should test, mandate labeling of ingredients and safety hazards, etc. but my body and mind are my most personal possessions, and my right to put what I want in my body is essentially absolute.

You can put whatever you want into your body, the FDA ensures that no one can SELL you poisonous food or medicine. You can still put whatever fool thing you want into your "most personal possession".

As far as the people who volunteered to take you to summer camp, those people were not doing it for pay, so they would fine. No one is banning giving rides. These companies are trying to be a taxi service without having to register or meet any of the requirements of a taxi service.

Nobody should be banned from driving others, whether for pay or not. Or should car-pooling be banned? When I went to summer camp as a kid, some counselors volunteered to drive campers for a small stipend. They drove their own cars, not at all regulated under taxi laws. Should that have been banned, so that I wouldn't have been able to get to camp, in the name of safety?

MyGaffer wrote:

Do you think the FDA should be abolished? I mean any adult should be able to pay any other adult for any old food and any old drug he cares to sell right? Regardless of whether the food if tainted or the drugs are safe. We give up a little bit of freedom for safer food and medicine. There are reasons for the current regulation of taxis.

The FDA certainly should not have the authority to ban. It should test, mandate labeling of ingredients and safety hazards, etc. but my body and mind are my most personal possessions, and my right to put what I want in my body is essentially absolute.

You can put whatever you want into your body, the FDA ensures that no one can SELL you poisonous food or medicine. You can still put whatever fool thing you want into your "most personal possession".

No, you can't. It is illegal to manufacture, posses, or sell crystal meth. Even if it MAY not be a crime to use it, there is no legal way to get crystal meth into you. Its like saying that it is legal to privately launch an ICBM, but not stating that there aren't any legal paths to accomplish this task.

Try get your private car insurance to pay medical costs when they find out you crippled a paying passenger. They won't pay out for un-inspected commercial vehicles either.

That's an issue between driver and insurer. Perhaps the driver has to get a more expensive policy. Regulation could require insurance for a passenger, but shouldn't go beyond that.

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Yes? If you don't want to work nights or holidays, don't apply for a job in a business that does that?

Except we're talking about the government mandating hours. Should convenience stores be forced to operate certain hours?

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I didn't know there was only 1 airline,

Does gov't set airlines' itineraries?

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1 communications company, 1 power company with a monopoly.

These are regulated monopolies in many areas, provide basic necessities, and involve large amounts of infrastructure, meaning the markets are far from ideal. It's a completely different situation than taxis.

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Hmm. So do taxi drivers.

But weren't you arguing that they should be forced to work?

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Hmm. So do taxi drivers. Holidays are the best times to earn money.

But you said no taxi driver would work holidays.

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Hmm. So do taxi drivers.

Not remotely.

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If they didn't, the exact company under discussion in this article wouldn't exist to try operate in the grey area of the market. Nobody would give a shit and would simply not take a taxi.

There's a difference between a necessary good and a desired good.

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A convenience store already charges more based on its opening hours.

But that should be illegal, right? We wouldn't want a business to provide a more convenient product at a premium.

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Another convenience store can't open up across the road and break regulations and undercut them.

Only because there aren't equivalent ridiculous regulations on convenience stores. But you unintentionally bring up a good point: the convenience store market has a substantially higher barrier to entry than a reasonably free taxi market. Thus market forces would work much faster and more effectively in the latter market, negating the need to regulate where cabs go and what prices they may charge.

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You seem confused. I'm stating what actually exists in the world. You are parroting unrealistic and completely clueless "solutions".

??? You have no idea how the world works besides "business bad, regulation good". Even more strangely, you believe that I believe the diometric opposite. On top of that, you insult me constantly.

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Err, they do? And they are also regulated? Limos? Car services? Airport shuttles? Hotel shuttles?

But you said that those shouldn't exist: that taxis should be forced to serve all routes at all times. There's no meaningful difference between a specialty taxi and these other services so why should one be allowed to exist and not the other?

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Yes you did, when you made some random bureaucrat jab that the market should solve everything. That's what happens when the market is let free to run itself. Regulating industries certainly has its own problems, but it beats the alternative.

No, I argued against certain regulations, not all regulations. That's an insane strawman you knocked down.

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Sigh, stores operate under regulations as well.

But not in a remotely relevant way. Do grocery stores pop up because they're forced to serve those areas? Would grocery stores forego certain profitable markets if not forced to serve them?

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And uh, newflash, governments actually do operate grocery stores in areas that can't support a privately owned store, because people would literally starve in the streets otherwise.

Which I'm not opposed to, but that has nothing to do with forcing grocery stores to operate in certain ways.

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They would, they'd go for the easy money, and leave everyone else shit out of luck. This is the part you don't understand about the world.

They'd serve the vast majority of markets. Tiny towns and rural unincorporated areas might not be served, but they aren't now anyway.

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They already exist, and are regulated.

For the third time, should they be allowed to exist?

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And if the laws weren't bullshit? You'd shrug your shoulders and let the other business sink you, right? No, you'd expect them to follow the same rules as you operate under.

I'd follow the law and expect others to, but that isn't the case here.

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What companies?

Never heard of a taxi company?

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You? Where is this happening with taxis? Where are all these "rich companies" or whatever? Does anyone think running a taxi is actually an easy path to riches?

It may not be as exagerated as you suggest, but those companies certainly lobby for legislation to protect their interests, and that's the kind of legislation we get. Just like wine stores lobbying to maintain the separation of wine and beer stores in NYC. That doesn't mean wine stores are profiting like crazy, but that they're legislating a niche to protect their interests.

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Of course they increase prices to cover complying with the laws they operate under, every company does.

Then those regulations don't end up costing the taxi companies.

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And who is laughing to the bank with some evil government assisted monopoly? You are acting like there is some evil cabal of vague "taxi companies" earning millions of dollars while all the drivers earn nothing, in bed with the government and busily enacting laws and regulations to keep the gravy train going.

You can put whatever you want into your body, the FDA ensures that no one can SELL you poisonous food or medicine. You can still put whatever fool thing you want into your "most personal possession".

Why should it be okay to do something, but not for others to provide you the means to do something? That seems like an entirely arbitrary distinction.

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As far as the people who volunteered to take you to summer camp, those people were not doing it for pay, so they would fine. No one is banning giving rides. These companies are trying to be a taxis service without having to register or meet any of the requirements of a taxis service.

They did do it for money, albeit probably not much. Regardless, why does that matter - why should an action become illegal as soon as it's done for pay?

There may be a debate to be had about whether regulations for taxi services are all reasonable, but one of the goals is to make sure that people get safely to their destination and charged the correct amount. The insurance requirement is also there to protect the passenger. This has a fun, easy-going feel, but I'm not sure that should really trump safety and fraud prevention.

Government simply has no compelling justification to use force (the threat of fines and/or imprisonment) to prevent an adult from contracting with another adult to do something which would otherwise be legal were money not involved. There are always well-intentioned excuses for such government intrusion on basic rights, such as fraud prevention--but fraud is already illegal, such laws already serve as a reasonable enough deterrent to prevent most of it, and the voluntary rating and reputation systems which "ride-sharing" communities use are excellent and less-intrusive ways to be proactive with the same issues professional licensing has traditionally tackled.

There can even be professional organizations which offer voluntary licensing, inspections, etc., to which companies or individuals could choose to submit for the purpose of gaining a recognized accreditation. Government need not mandate it; the market would provide for such a thing because some customers would find it an added value.

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Not to mention preventing various forms of discrimination (whether not picking up certain people, or not providing services to certain areas e.g. black neighborhoods).

The idea that no one would ever serve minority communities if not for government mandates requiring it is a strangely common fixation, and a very mistaken one. Many of the reasons why this is the case are tackled in this nice little article:

Even in then worst of times, when minority communities were pervasively discriminated against and systematically underserved, free markets allowed them to develop ways to serve themselves--e.g., Motown records, and the many Jewish institutions which developed and were at the cutting edge of economics, politics, and technology for centuries because of discrimination against them. When government decides to get involved, however, it's more often to do harm rather than good--for example "separate but equal" Jim Crow laws which worsened and codified what had been informal discrimination into formal law.

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The counterargument is that regulation also serves to maintain rates at a certain level, and that may not be good for consumers. But I don't think this is the best solution, especially given that part of why they are undercutting the competition is by cutting corners on licensing, vehicle maintenance, and employee pay and benefits (since basically they are getting a large number of part-timers to do the work).

It's not a legitimate role of government to create artificial scarcities and barriers to entry, even if the goal is artificially increasing wages and benefits--because government can only do so by violating one party's basic rights in order to enrich another party. That's bad enough, but then government licensing mandates for things as basic as sharing transportation or the like always lag behind the times when disruptive technologies develop and prop up old, inefficient industries at a great cost to their forced-to-keep-using-them customers.

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Last point, undercut taxi services this way, who is going to provide taxi services in the middle of the night? Is Lyft going to get volunteers for those shifts too?

There will always be a need for actual taxi and/or similar professional services for just this reason. We'd just need fewer of them overall, and they'd specialize in these high-demand times. The market adjusts to serve whatever conditions in which it finds itself--that's one of the advantages of having a free market: it's flexible to changing circumstances.

Except that many people in our society are willing to trade some freedoms for a safer life. This is not always a bad thing as you make it out to be.

Do you think the FDA should be abolished? I mean any adult should be able to pay any other adult for any old food and any old drug he cares to sell right? Regardless of whether the food if tainted or the drugs are safe. We give up a little bit of freedom for safer food and medicine. There are reasons for the current regulation of taxis.

While regulation does have its place, and there are absolutely gray areas this quote does not cover, the OP does make valid points. Comparing tainted food or medicine with a ride sharing service is excessive, since taxi service is not necessary for preserving life. If you're not comfortable with the service, feel free to walk, but don't ruin this for everyone else.

Yeah, you'd really keep this laughable attitude when your friend or family member dies to some jerkoff trying to earn some extra cash by running around picking up people in his brakeless, bald tyred un-inspected shitbox.

if any friend or family lacked the common sense to stay out of a brakeless, bald tyred un-inspected shitbox taxi (instead of just driving their own brakeless, bald tyred un-inspected shitbox vehicle), i'd say good riddance.

To me, the biggest issue is going to be the drivers insurance. Forget about if government eventually deciding that a duck is really a duck. That will take for ever and I'm sure both companies will fight it as long as reasonably possible.

You'll run into problems with insurance much more quickly. A major accident will happen. It's just a matter of time until it does and if the insurance company gets even the slightest hint of this "ride sharing" going on they'll deny the claim and things will go to hell for the driver, the company and even the passenger. Yes, it will suck for even the passenger as they will have medical bills no one will want to pay and will be stuck with lawsuits that will drag out for quite a while in all likelihood. All the while their credit is ruined with medical bills they can't afford to pay.

It's not about a "right to taxi service." It's about maintaining quality of life, it's about providing people with an alternative to owning cars (which is good for everyone), it's about making your city accessible to visitors (who spend money in your city). I think these are reasonable goals for a municipal government to use as a basis for setting policies.

Yes, the city has a compelling government interest in ensuring that a certain level of taxi service is provided at all times. As such, it absolutely can (and arguably should) regulate that market such that any player wishing to enter the market commit to providing a level of service that furthers that compelling government interest.

So yes, daytime riders should subsidize nighttime riders, and those wishing to provide taxi service should be "forced" into providing weekend, evening, and holiday service as well. "Forced" being in quotes since nobody is actually being forced to participate in this regulated market.

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To me, the biggest issue is going to be the drivers insurance. Forget about if government eventually deciding that a duck is really a duck. That will take for ever and I'm sure both companies will fight it as long as reasonably possible.

You'll run into problems with insurance much more quickly. A major accident will happen. It's just a matter of time until it does and if the insurance company gets even the slightest hint of this "ride sharing" going on they'll deny the claim and things will go to hell for the driver, the company and even the passenger. Yes, it will suck for even the passenger as they will have medical bills no one will want to pay and will be stuck with lawsuits that will drag out for quite a while in all likelihood. All the while their credit is ruined with medical bills they can't afford to pay.

Yeah, you'd really keep this laughable attitude when your friend or family member dies to some jerkoff trying to earn some extra cash by running around picking up people in his brakeless, bald tyred un-inspected shitbox.

if any friend or family lacked the common sense to stay out of a brakeless, bald tyred un-inspected shitbox taxi (instead of just driving their own brakeless, bald tyred un-inspected shitbox vehicle), i'd say good riddance.

Because every time you get in a taxi, you remove the wheels and inspect the thickness of the brake linings. You also check the vehicle records to ensure that any recalls have been performed on that vehicle.

We've gone way off track, to get back to the heart of the matter, I agree with you, but I don't agree with this specific company trying to get away with what it's doing. It's both fraught with issues that existing regulation tries to prevent, and they are operating at the cost of the existing businesses by not complying with regulations, which is unfair or even illegal business practise.

I'd be amazed if this company survived, or at least even survived in its current form without being forced to comply with existing regulations. It's one major event from being sued into oblivion. One crash, one crippled or dead driver or passenger, one assault from either driver or passenger, and things like insurance, duty of care kick in.

Does anyone really believe that journalist trying the service to write about just HAPPENS to get the head guy's of both companies on their fist pickup for each company? Seriously? That does not pass the smell test.